MEASURING RETURNS

Discuss MEASURING RETURNS within the Financial Management forums, part of the PUBLISH / UPLOAD PROJECT OR DOWNLOAD REFERENCE PROJECT category; MEASURING RETURNS
TWO SOURCES OF INCOME
DIVIDEND PAID BY THE MUTUAL FUND
CAPITAL GAINS BY BUYING LOW AND SELLING HIGH
...

Dividends are reinvested at ex dividend NAV
Assume purchase of 100 units at Rs 12.25
Total investment Rs.1225
NAV of Rs 15 ex dividend of Rs 0.5
Dividend received is Rs.50 I.e. 100*0.5
NAV at end period is 18.30
No. of units reinvested : 50/15=3.3333
End period value of investment is
103.3333*18.3=1891
Roi is
((1891/1225)-1)*100=54.37%
Widely used by MF tracking agencies

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